USA — The 5th U.S. Circuit Court of Appeals has decided to fast-track Illumina Inc’s appeal against a federal agency order that mandates the company to divest Grail LLC, a cancer diagnostic test manufacturer.
Despite objections from the Federal Trade Commission (FTC), the New Orleans-based court ruled in Illumina’s favor, citing the company’s need for expedited consideration of the antitrust dispute.
Illumina, based in San Diego, specializes in gene sequencing and is disputing the FTC’s order issued on April 3, which alleges that its acquisition of Grail for US$7.1 billion will impede competition in the cancer-testing market. Illumina has refuted the allegations.
The FTC has argued that the rapid pace of the litigation could put an undue burden on the agency.
The FTC’s opposition is based on what it calls the “number and complexity” of the issues Illumina is planning to raise. The agency has claimed that an expedited schedule would be “highly prejudicial” to its case.
In contrast, Illumina’s lawyers have asserted that an accelerated review will allow for earlier access to a life-saving screening test and eliminate unnecessary roadblocks in the fight against cancer.
The biotech company maintains that the appeal will not harm competition in the cancer-testing market.
The court’s decision to expedite the litigation has significant implications for both Illumina and the FTC.
If Illumina’s appeal is successful, the biotech company will not have to divest Grail, and the acquisition will proceed as planned.
On the other hand, if the FTC prevails, Illumina will be forced to sell Grail to another company, potentially disrupting the cancer-testing market.
In 2021, the Federal Trade Commission (FTC) filed a lawsuit against Illumina over its acquisition of Grail, a former subsidiary of the company.
Despite the FTC challenge and another from European Union regulators, Illumina completed the deal later that year.
The FTC argued that Illumina’s acquisition would stifle innovation and increase prices in the cancer diagnostic test market.
Grail utilizes Illumina’s DNA sequencing technology to develop a blood test for cancer detection, the agency said.
Last year, an administrative law judge ruled against the FTC, marking the first time that the agency’s in-house court had rejected an FTC merger challenge.
The agency, however, appealed the decision to FTC leadership and won a divestiture order.
Meanwhile, in the European Union, Illumina is contesting an order that requires it to divest Grail. The European Commission mandated the takeover’s reversal in December 2021.
The legal case, which is being heard by the 5th U.S. Circuit Court of Appeals, is Illumina Inc and Grail Inc v. Federal Trade Commission, No. 23-60167.
Legal representation for Illumina is being provided by David Marriott and Christine Varney of Cravath, Swaine & Moore.
Grail is being represented by Michael Egge, Marguerite Sullivan, and Al Pfeiffer of Latham & Watkins. The FTC’s legal counsel is Matthew Hoffman of the FTC.
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